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Ireland's Trading Potential with Central and Eastern European Countries: A Gravity Study

Author

Listed:
  • Marius Brülhart
  • Mary Kelly

Abstract

Using a gravity model, we estimate the magnitude of potential trade flows between Ireland and the five CEEC countries currently negotiating accession to the EU. We find that Irish exports were already close to their "normal" level in 1994, but that imports from the CEECs were still only half of their "normal" size. The value of estimated "normal" trade corresponds to 0.8 percent of Irish GNP. The actual share in 1994 was 0.5 percent. EU enlargement would raise Ireland-CEEC trade to 1.2 percent of GNP. The short-term scope for trade expansion therefore appears to be modest. Stronger potential for trade growth emerges in the "long-term" scenario, which assumes partial income convergence of the EU and the CEECs. According to our upper-limit estimate in the convergence scenario, the value of Irish trade with the CEECs could reach 7.7 percent of Irish GNP in 2020.

Suggested Citation

  • Marius Brülhart & Mary Kelly, 1998. "Ireland's Trading Potential with Central and Eastern European Countries: A Gravity Study," Economics Technical Papers 9815, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduet:9815
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    Cited by:

    1. Kiril I. Tochkov, 2018. "Trade Potential and Trade Integration of the Russian Far East: A Regional Perspective," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 4, pages 21-38.
    2. Güzin Bayar, 2018. "Estimating export equations: a survey of the literature," Empirical Economics, Springer, vol. 54(2), pages 629-672, March.
    3. A. Porojan, 2001. "Trade Flows and Spatial Effects: The Gravity Model Revisited," Open Economies Review, Springer, vol. 12(3), pages 265-280, July.
    4. Sotiros, Dimitrios & Rodrigues, Vasco & Silva, Maria Conceição, 2022. "Analysing the export potentials of the Portuguese footwear industry by data envelopment analysis," Omega, Elsevier, vol. 108(C).
    5. Matthew Q. McPherson & William N. Trumbull, 2004. "Winners and Losers: The Effect of Cuba's Political-Based Trading Policies," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 14.
    6. Loitongbam Bishwanjit Singh, 2021. "Impact of India-ASEAN Free Trade Agreement: An Assessment from the Trade Creation and Trade Diversion Effects," Foreign Trade Review, , vol. 56(4), pages 400-414, November.
    7. Zhang, Daowei & Li, Yanshu, 2009. "Forest endowment, logging restrictions, and China's wood products trade," China Economic Review, Elsevier, vol. 20(1), pages 46-53, March.
    8. Jagdambe, S., 2018. "Impact of AIFTA on Agriculture Trade Creation & Trade Diversion: Gravity Model Analysis," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276046, International Association of Agricultural Economists.
    9. Yeboah, Osei-Agyeman & Shaik, Saleem & Wozniak, Shawn J. & Allen, Albert J., 2011. "Does the WTO Increase Trade? The Case of U.S. Cocoa Imports from WTO-Member Producing Countries," Journal of Food Distribution Research, Food Distribution Research Society, vol. 42(2), pages 1-11, July.
    10. Jagdambe, Subhash & Kannan, Elumalai, 2020. "Effects of ASEAN-India Free Trade Agreement on agricultural trade: The gravity model approach," World Development Perspectives, Elsevier, vol. 19(C).
    11. Chandni Dawani & Deepa Pareek, 2024. "Analysing India’s Export Competitiveness in ASEAN Economies: Insights from Viner’s Trade Creation Model," Journal of Asian Economic Integration, , vol. 6(1), pages 7-30, April.
    12. Marques, Helena, 2002. "Trade Similarities between Eastern and Southern Europe: Opportunities or Competition?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 3(2), pages 1-20.
    13. Yeboah, Osei-Agyeman & Shaik, Saleem & Wozniak, Shawn J. & Allen, Albert J., 2008. "Increased Cocoa Bean Exports under Trade Liberalization: A Gravity Model Approach," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6819, Southern Agricultural Economics Association.
    14. Surender Kumar & Prerna Prabhakar, 2017. "India’s Trade Potential and Free Trade Agreements: A Stochastic Frontier Gravity Approach," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 17(1), pages 1-19, March.
    15. Lubinga, Moses H., 2009. "Factors Affecting Uganda's Bilateral Trade Flows: An Application of the Gravity Flow Model," Research Theses 157593, Collaborative Masters Program in Agricultural and Applied Economics.
    16. Ahcar, Jaime, 2018. "Colombia’s potential for trade with the European Union and other major global markets," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    17. Frank Barry, 2004. "Prospects for Ireland in an Enlarged EU," The World Economy, Wiley Blackwell, vol. 27(6), pages 829-852, June.
    18. Enrique Martínez-Galán & Maria-Paula Fontoura & Isabel Proença, 2005. "Trade Potential In An Enlarged European Union: A Recent Approach," International Trade 0508011, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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